Pay What You Want: Less Crazy Than It Sounds?

A study of U.S. synagogues that have adopted a "pay what you want" model in place of their traditional dues structures offers some intriguing possibilities for associations.

In the past five years, about 30 synagogues in the U.S. have adopted a "pay what you want" policy in place of their traditional dues models. The UJA Federation of New York studied this trend in a report released in February. Could PWYW work for associations? If you try, consider these lessons from synagogues' experience.

Suggest a "sustaining amount." PWYW synagogues typically base this on total budget divided by the number of member households, offering an element of transparency to their financial operations. It also takes advantage of the anchoring effect: "Most synagogues rely on a sizeable percentage of members who donate right at the sustaining amount," the report notes.

Offer incentives for paying more. Higher givers are necessary for PWYW to work. Most PWYW synagogues publicly recognize higher givers. At least one invites its top givers to a barbecue at the rabbi's home.

New members are less likely to pay the sustaining amount. You could view this as either a problem or an opportunity. As one synagogue director in the study said about new members, "Are they paying the sustaining amount? Not many of them. But are they paying money we never would have seen? Definitely, and now it's up to us to engage them in a meaningful way."

Don't worry too much about free riders. "Not a single synagogue reports that this was a problem," according to the report, adding that most PWYW synagogues felt "the sense that the synagogue is better off—financially and culturally—when it presumes people will be generous."

[This article was originally published in the Associations Now print edition, titled "Dues: You Decide."]